Your pension will still continue if you move abroad. Pension payments are currently made directly into a bank, building society or credit union account in your name. If you move abroad, similar arrangements can be made to pay your pension into a foreign bank account using a global transaction service. Payments made to a foreign bank account could take up to seven working days longer than domestic payments.
NILGOSC will issue a Life Certificate to all pensioners living abroad on an annual basis. This certificate verifies that you are alive and it must be signed and returned to NILGOSC.
A pensioner may request that their annual pension benefit is compounded and paid as a one off lump sum payment. There are two tests to determine if a compounded lump sum can be paid.
Test one for trivial commutation
- A pension can only be commuted from age 55 or earlier if the ill-health condition is met. The ill-health condition is that NILGOSC has received evidence from a registered medical practitioner that the member is and will continue to be incapable of carrying out their job because of physical or mental impairment and they have ceased to carry out their job. A male pensioner with a GMP will not be eligible to commute until 65. A female with a GMP will not be eligible to commute until 60. Dependant’s pensions have no age restriction.
- The pensioner must have available lifetime allowance and the total value of all the pension rights held in all pension arrangements including the LGPS (NI) must not exceed £30,000.
- A dependant’s pension can only be commuted if the total value of each dependant’s pension must not exceed £30,000. All NILGOSC pensions must be commuted (not including pensions in their own right in payment).
- All commuted payments made, from any scheme, must be made within a 12 month period.
- The payment of commuted benefits extinguishes the rights to all benefits in the scheme, including contingent death benefits.
Test two for trivial commutation – ‘De minimis rule for pension schemes’
- A pension can only be commuted from age 55 or earlier if the ill-health condition is met. The ill-health condition is that NILGOSC has received evidence from a registered medical practitioner that the member is and will continue to be incapable of carrying out their job because of physical or mental impairment and they have ceased to carry out their job. A male pensioner with a GMP will not be eligible to commute until 65. A female with a GMP will not be eligible to commute until 60. Dependant’s pensions have no age restriction.
- The member is not a controlling director of a sponsoring employer of the scheme or of any related scheme, and is not a person connected to such a person.
- The payment does not exceed £10,000
- The payment does not exceed £10,000, for all NILGOSC benefits that are post 09 leavers (not including dependant’s pensions in payment). If you have a mix of pre and post 09 leaver pensions, small pot does not apply.
- The payment extinguishes the member’s entitlement to benefits under this scheme.
- No recognised transfer was made out of this or any related scheme in respect of this member during the 3 years preceding the date of the payment.
You cannot assign your pension benefits to someone else nor use them as security for a loan.
HM Revenue and Customs (HMRC) informs NILGOSC of the tax codes which must be applied to pensioners’ records.
If you have any tax related queries, including queries on your tax code, you should contact the tax office directly on 0300 200 3300 (0044 135 535 9022 if overseas).
We know that tax rules can sometimes be unclear, particularly for members who have just started to receive their pension.
The HMRC website has a section on National Insurance and Tax after State Pension Age which gives help on what happens once at State Pension Age and the tax allowances you may be entitled to.
Should you wish to discuss any item relating to your pension increase please contact the Payroll Team on our Direct Line 0345 3197 326 or email us at payroll@nilgosc.org.uk. Please remember that our busiest times are on pay days and the days that follow when we deal with very high volumes of calls. You may find it easier to speak to us later on in the week when the number of incoming calls decreases.